Compute the total cost of a health insurance plan: premium plus expected out-of-pocket given your usage.
Total annual cost
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Premium
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Out-of-pocket
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Worst case (hit OOP max)
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The premium is only half of what a plan costs
People shop health insurance the way they shop a phone plan, by comparing the monthly premium and picking the cheapest. That instinct is wrong, and it can cost thousands. A low premium plan often pairs with a high deductible and high coinsurance, so the moment you actually use care, the cheap plan can become the expensive one. This calculator fixes that by computing total annual cost, the premium plus the out of pocket spending you would realistically incur given how much care you expect to use.
The model walks through the same sequence a real plan does. You pay the full negotiated cost of care until you meet the deductible. After that, the plan splits costs with you according to the coinsurance percentage. And no matter how sick you get, your out of pocket spending stops at the out of pocket maximum. The tool layers the premium on top of that out of pocket figure to give you one number to compare across plans.
Why total cost beats the sticker premium
The right comparison is total expected cost equals premium plus out of pocket, where out of pocket is the smaller of two things: what you actually spend stepping through the deductible and coinsurance, or the out of pocket maximum that caps it. Whichever plan delivers the lowest total for your expected level of care is the winner, and that is frequently not the plan with the lowest premium. A healthy single person who barely sees a doctor and a family managing a chronic condition will often reach opposite conclusions from the same set of plans, which is exactly why a generic answer is useless and a personalized total is essential.
Pricing out a moderate use year
Take the defaults: a $6,000 annual premium, a $3,500 deductible, 20% coinsurance after the deductible, a $9,450 out of pocket maximum, and $5,000 of expected medical use measured at billed cost. Here is how the calculator assembles your total.
| Step | Amount |
|---|---|
| You pay up to the deductible (first $3,500 of the $5,000) | $3,500 |
| Coinsurance on the rest (20% of the remaining $1,500) | $300 |
| Total out of pocket (well under the $9,450 cap) | $3,800 |
| Annual premium | $6,000 |
| Total annual cost | $9,800 |
So a plan advertised at a $6,000 premium really costs $9,800 in a moderate use year. That $3,800 gap between the premium and the true cost is precisely what gets lost when you compare plans on the premium alone. Note too that the worst case, if you hit the out of pocket maximum, is $6,000 plus $9,450, or $15,450. That ceiling is the most this plan can cost you in a catastrophic year.
The out of pocket maximum is your floor under disaster
The out of pocket maximum is the single most underappreciated number on a plan. It is the legal ceiling on what you can be forced to spend on covered, in network care in a year, after which the plan pays 100%. Under the Affordable Care Act, federal rules cap that maximum each year, and for 2025 the limit is $9,200 for an individual and $18,400 for a family. The $9,450 in the example is just the calculator's editable default, so set it to your own plan's actual maximum. The chart contrasts the expected moderate use cost against the worst case.
Who this is for and where to push the numbers
This is for anyone facing open enrollment with two or three plan options, through an employer or the ACA marketplace, and no clear way to compare them. The smart approach is to run the same expected use figure through each plan and compare totals, then run a high use scenario to see which plan protects you best in a bad year. A practical tip for healthy people: a high deductible plan paired with a Health Savings Account often wins, because the lower premium plus the triple tax advantage of the HSA can beat a richer plan you rarely use. One honest limitation: the model treats your medical use as a single billed cost figure, while real plans apply copays to visits and prescriptions that may not run through the deductible the same way. Treat the result as a strong comparison tool rather than an exact prediction.
What is the difference between a deductible and an out of pocket maximum?
The deductible is what you pay before the plan starts sharing costs. The out of pocket maximum is the total ceiling on everything you pay in a year, including the deductible, coinsurance, and copays. Once you hit the maximum, the plan covers 100% of further covered, in network care. The deductible is the start of cost sharing; the maximum is the end of it.
Should I pick the lowest premium plan if I am healthy?
Usually a low premium high deductible plan is the better bet for someone who rarely uses care, and pairing it with an HSA sharpens the advantage through tax free contributions, growth, and withdrawals for medical costs. The risk is an unexpected serious illness or accident, but the out of pocket maximum caps that downside. Run both a low use and a high use scenario before deciding.
Do premiums count toward my deductible or out of pocket maximum?
No. Premiums are separate. They are what you pay to have coverage at all, and they do not count toward either the deductible or the out of pocket maximum. That is exactly why comparing premiums alone is misleading, and why this calculator adds the premium to your expected out of pocket spending to show the true total.